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    Shell crude oil theft scandal: Three commercial banks implicated over court contempt

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    Citi Bank and two other commercial banks are in big trouble for violating a court order freezing the accounts of Dutch Oil giant, Royal Shell, in a case involving the alleged theft of over two million barrels of crude.

    A federal court in Lagos had issued an injunction barring Royal Dutch Shell’s Nigerian subsidiaries from withdrawing money at 20 local banks until it ringfences potential damages in a lawsuit brought against the oil major by Aiteo Eastern E&P.

    Aiteo is accusing Shell of deliberate improper metering of the Nigerian company’s oil exports from the Bonny Light terminal. It is seeking $2.7 billion over the pipeline deal plus $1.28 billion for lost oil sales, the court documents show.

    Aiteo is seeking about $4 billion in total over alleged problems with the Nembe Creek Trunk Line (NCTL) pipeline it bought from the Anglo-Dutch group in 2015 and over claims Shell undercounted its oil exports.

    The court specifically directed the 20 banks, joined in the suit, where the Shell companies operated accounts in Nigeria to “ring-fence any cash, bonds, deposits, all forms of negotiable instruments to the value of $2.7 billion and pay all standing credits to the Shell companies up to the value into an interest yielding account in the name of the Chief Registrar of the court, who is to hold the funds in trust” pending the hearing of the motion and determination of the motion on notice for
    interlocutory injunction filed before it by Aiteo.

    The court had on January 25, 2021, while granting an ex parte application filed by Aiteo’s Counsel, Kemi Pinheiro, frozen SDPC’s account as well as ordered all banks in Nigeria that has any money belonging to SDPC in their custody, to file affidavit showing how much the debtor creditor has with them.

    But at the resumed hearing of the case on Wednesday, Pinheiro told the court that he had filed two applications, the first a motion for interlocutory injunction and a committal of proceedings against the three banks for disobeying the court order to block Shell Petroleum Development Company of Nigeria Ltd bank accounts.

    Pinheiro told the Judge that the alleged contemnors willfully disobeyed the court’s interim orders of January 25, 2021 directing them to block SPDC accounts, for allegedly “interfering, obstructing and/or frustrating compliance with the interim orders.”

    However, other lawyers in the matter challenged the hearing of the contempt application on the ground that they had separate applications challenging the jurisdiction of the court.

    Counsel to Shell, Adewale Atake (SAN), informed the court that he had two applications pending before the court, one application was seeking to stay proceedings and the other challenging the jurisdiction of the court and as well as seeking to discharge the Mareva Injunction.

    He said the Fifth Defendant also had a motion seeking an extension of time to file response to the Plaintiff’s motion.

    Atake made an oral application that the Mareva Order be varied, on the ground that it had imposed “hardship” on Shell and even the Federal Government.

    He said there was a danger that the oil giant could not pay workers’ salaries, and contractors would not be able to execute contracts.

    But Justice Oluremi Oguntoyinbo who presided on the case, declined his oral application, noting that the Federal Government was not a party to the suit.

    Justice Oguntoyinbo of the Federal High Court in Lagos will on March 22 decide whether or not to hear a contempt proceeding filed against three Nigerian banks by Aiteo Eastern E & P Company Limited for allegedly disobeying an order of the court.

    Pinheiro further prayed for an order “directing the Inspector General of Police through his officers to “immediately arrest, detain, investigate and prosecute the respondents for interfering with the course of administration of Justice”.

    The lawyer also informed the court that five of the banks had complied with the directive of the court while three others, FCMB, Wema Bank PLC and Zenith Bank Plc, had no relationship with the Defendant.
    He asked the court to discharge the banks.
    Justice Oguntoyinbo adjourned ruling to March 22, 2021.

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